Synagie reverses from loss to post S$4.1m H1 profit on higher e-commerce activity
SYNAGIE Corporation has posted its first net profit since its initial public offering in August 2018 as a result of a surge in e-commerce activity during the Covid-19 pandemic. The company was S$4.1 million in the black for the half-year ended June 30, 2020, reversing from a loss of S$3.7 million a year ago.
Revenue increased 325.6 per cent to S$38.3 million, while gross profit jumped 411.9 per cent to S$12.9 million.
A surge in demand for products related to Covid-19 and higher e-commerce activity due to stay-home measures caused revenue from the e-commerce segment to rise 435.3 per cent.
The insurtech segment posted a 55 per cent, or S$1 million, fall in revenue. The uncertainty over the pandemic led to slow contract renewals.
Synagie's net profit comes as the group is proposing to dispose of its e-commerce business for about S$61.7 million to focus on its insurtech business. The sale, which involves the entire e-commerce, e-commerce enabler and logistics business, will be to a consortium of investors that include Synagie's three founders, Alibaba Singapore and a fund managed by venture capital firm Gobi Partners Group.
The board believes that the proposed disposal will enable the group to realise value for its e-commerce business without exposure to future market risks. It said the surge in revenue from this segment in H1 was due to one-off demand. Synagie expects revenue to normalise over the next few months.
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The group's gross profit margin was higher at 33.7 per cent for the half year, compared with 28 per cent a year ago. This was mainly due to an improved product mix in the e-commerce segment. Synagie had also achieved its revenue targets, allowing it to earn the target incentives.
Earnings per share was 1.36 Singapore cents, compared with a loss per share of 1.43 cents a year ago.
The counter closed at 19.3 Singapore cents on Thursday, up 0.1 cent or 0.52 per cent.
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